MetaTrends Profit

Paramount's recent Acquisition was quite accretive

Yahoo! CWEI
The recent acquisition raise per unit production 22% and per unit reserves 26%. It brought payout ratio (POR) down too (and it is declined since then to a projected 70%).
http://www2.ccnmatthews.com/scripts/ccn-release.pl?/2005/03/23/0323135n.html

I'd like them to make purchases this good every month.

But of course, the less they pay the better.

The only logical way for us to measure whether a company should be making a buy, is the effect it has on current and future operations.

Since trusts can hedge their production forward, "expensive" acquisitions (especially in the PMT.UN target area of high production, fast depleting shallow gas) can be hedged to guarantee a tidy profit for unitholders. I don't care that Mercedes dealers pay more per car for inventory than Hundai dealers. What counts is profit margin and turnover combined, IMO (which is why it is misguided to have a fixation on netback without considering changes in production per unit and recycle ratio).

The fact that POR ratio is declining suggest that it helps to insulate the trust from soft commodity prices, should that happen, because of increased cash flow available compared to if the acquisition hadn't been made, making distribution level and cash yield more safe.

posted by agrossfarm @ 7:10 AM